tv [untitled] April 24, 2012 2:30pm-3:00pm PDT
this is collaboration between the arms of the district. as hydra mentioned, we have done presentations already. in chinatown, the kids were excited about tap water. it is possible. we will help to make it happen. >> is there any other public comment? do i have a motion? >> so moved. >> the motion is moved and seconded. all those in favor? opposed? the motion carries. item 11. >> adopt the mitigated negative declaration, reporting program and the findings as required by the california environmental quality act.
approve the plans and specifications and work with the waste water contract in the amount of $15 million. authorize to finalize negotiations and enter into an mou with the port of san francisco to attain necessary access for implementation and authorize the general manager to negotiate and -- and execute a new moa. >> thank you. this is the item you hard referenced earlier. bryant gave his report as how the asset has failed as recently as six weeks ago. it also failed twice in 2008 and once in 2006. we have it on life-support and we need to move it forward.
if it is approved today, we will be able to have the replacement complete prior to the commencement of the america's cup races, july 4, 2013. and hopefully avoid any failures in that time between. hopefully with your consideration we can move this forward. >> thank you. commissioners khomeni questions? any public comment? -- commissioners, at any questions? -- any questions? moved and seconded? all in favor? the item carries. item 12 is continued to our next meeting. item 13. >> approve street light policy and authorize the general manager -- by other city
agencies and to issue licenses for full use 2 nahyan visible entities and authorize the power enterprise to develop a procedure for reviewing and approving the use of sfpuc light poles for non-lighting purposes. >> what we have before you is our recommendation for establishing a policy that allows us to move forward with letting non-3 light purposes on our street light poles when there not generating-revenue generating -- when they are not revenue generating activities. we would like to work with them to allow use of the polls as appropriate under the guidance listed here. i am happy to take any questions. thank you. >> did you consider charging for
the capability? >> we could. there will be expenditures on the part of the project proponent. there will need to demonstrate to us that the structural integrity of the poll is not compromised -- pole is not compromised. there will need to meet the ceqa compliance. there will need to invest some time in order to demonstrate to as the appropriateness of the use. it will not be free to the counterparties. we're not charging for the use to generate revenue. there are and unease whoever approaches in the past who have a business interest in using our non-municipal departments to have a business interest in using our light poles. we see this as revenue generating opportunities. this is specific to those opportunities that are not
revenue generating. >> city departments. >> correct. >> city departments, neighborhood association. thank you. any questions? public comment? seeing none, can i have a motion? >> moved. >> second. >> and seconded. all those in favor? the motion carries. item 14. >> presentation discussion of the proposed contract rate scheduled to recover the project projected water rate water requirements. under the terms of the to basnight water supply agreement between the city and county of san francisco and wholesale water customers. >> could afternoon. -- good afternoon. this is an update for you.
we do have a public hearing scheduled for two weeks from now to consider the proposed rate change for the wholesale revenue -- rates for fiscal 13. this is an update on the process thus far. when we talk about water rates, we want to look at what the current year looks like and we have shared much of this with you already during budget process and the quarterly updates. just quickly, the water deliveries we have seen through the current year have been slightly below budget as well as your to the projections. that translates into a $3.70 million and revenues below expectation. as we shared with you, we have been able to replace those lost revenues with onetime items. the overall prices would be fine in the current year. the next set of numbers shareece u how the fund balances change
over the last few years and it has been trending down. we're looking for fund balance to bounce back up at the end of this current year at $33.60 million. a number to keep in the back of your mind, we like to have two months' worth of revenue or expenditures in our fund balance for prudent planning purposes. that is $50 million. that is our target. the balancing account pertains to or wholesale customers on the water side. that has to do with the cumulative variants that occurred over the past few years. you will see that for the end of the current year. $22.70 million. that amount will be rolled into the fiscal 13 rates will be talking about. you will see this has been
declining, slightly down from 2007 trade we're projecting flat water deliveries over the next two-year budget cycle. curt and water delivery assumptions is important and we talk about city rates. that is the denominator in the unit cost calculation. if we come in short that results in a revenue shortfall. if we under project and have more sales, that is a difficult -- additional revenues we will be dealing with. our contract allows this to be up at the end of the year. this chart is one that is the same charge as would i showed you. it has more data points. it is a monthly charge. you will see a slight uptick if you look at the wholesale line and the straight line there, the slight uptick you see is some glimmer of hope over the past few months indicating the dry weather has increased overall demand.
however, prudent planning requires us to set our rates according to the trend line you see there. what -- how that translates into our delivery numbers, 137 million gallons per day. which is the denomination as we said our rates. the -- the denominator. 137 million gallons per day, we had two alternatives when we were considering the fiscal 13 rates for the wholesale customers. we could keep our mid year rate triggered reinstituted a midyear rate trigger which allows us to readjust rates if need be. if deliveries came in below expectations. and if we have that, we would not have to have as conservative a delivery assumption. we needed to have a conservative delivery assumption without the rate trigger. our long-term planning that we
shared with you during the budget process is over 10 years and we want to make sure those numbers we present to you are based on normal weather patterns, not dry, not wet. we have a very dry winter in the current year that we are not expecting to occur again next year. if you look at the charts that i shared with you previously, that trend line indicates what is expected from the average weather perspective. that is what has caused us to project the 1 37 million gallons per day. we do reach our customers through rate noticing. we gave them 60 days to weigh in. the comments we received from them indicated a preference was to not have the rate trigger. and to look at a slightly more conservative water delivery assumption. that is what we will be presenting to you in two weeks. we received several e-mail
comments from our wholesale customers as well as forwarding comments and we share this with you in this package. -- shared this with you in this package. the wholesale revenue requirement is made up of four main components, operating costs, the pre-2009 estimates and wholesale repays as for the assets in place when the new contract went into affect. the debt service costs is the one that is driving the increase in wholesale revenue requirement. revenue funding capital and we have the repayment to the balance as well. all these role in to the rates reset each year. you'll see in the fiscal 13 column we have $200 million in need where we need to match with our rates reset. the slide in keep some rate changes.
a very large 38% rate change in the current year. we will not be repeating at any time soon. we are projected to make 11.4% rate change in fiscal 13 for next year. with rates that vary between 7% and 16%. as you see there, having an 0 rate increase. since we share with you during the budget process -- we have shown you through fiscal 23, additional rate changes. as compared to what we had a year ago, with our 10-year financial plan, the overall rate that we're showing you here which will be in 20/20 three at
$5 is slightly less than what we showed a year ago of $5.16. you see there is a slight reduction in the cost. there is a note to at the bottom of this slide about a $50 million repayment has been included in fiscal 15 for the pre-existing assets. you have -- this is the pennies per gallon slide which shows costs -- >> is there any way to clarify, i cannot download materials. is there any way to make the focus more clearly the response in the monitor? >> would -- which slide would like? >> it is blurred. >> these screens are small and
it makes it difficult to see. thank you. but penney's per gallon in showing how that is changing over time with capital bling largest reason why costs are increasing. the good news here is there is good news with increasing costs, that is flattening out. that should remain flat until the debt service is paid off over 30 years. this slide shows you how our unit cost is calculated. it is of fairly simple calculation. we take our revenue requirement and subtract our fixed revenues which is the major cost and that sort of thing. we put that over or water deliveries which is that denominator and that is how we come up with costs 3 we're looking at a $2.93 rate.
the untreated water we discounted for customer who receives and treated water. we take the wholesale rate in back of the cost of treatment. that is one penny in the new year. 2014. this is the rate schedule which will be considering for action to weeks from now. i am happy to take your questions. president moran: other questions? thank you. public comment? >> we are comfortable with the staff recommendation, for your consideration. >> there has been a great deal of discussion about, we shoot
ourselves in the foot. we know how much the system is going to cost. we know how much revenue we will need. and we divide things and we have no way of knowing that with any precision. never have. it is difficult to know. we create risk and uncertainty. the question has been, how do we deal with that? the first proposal was to have a trigger. this was to be conservative. it is a slightly better way of doing it. i also notice that part of what this started is a discussion between puc staff and posco staff. well we keep this stable. it is a difficult thing to solve but i am glad we're joining at issue. fox fop's i look -- i look
forward to this. any public comment? thank you. moving on to item 15. >> approve and authorize the general manager or his designate to consider and if appropriate, to approve a potential increase in the existing contract cost contingency for water enterprise contracts. in the amount of 610,000. >> i am here to answer any questions you may have, commissioners. >> any questions? any public comment? thank you. could i have a motion? >> so moved. >> moved.
and a second? >> and seconded. all those in favor? opposed? the item carries. item 16. >> authorize the president of the sfpuc to execute a joint powers agreement with merced, modesto, oakdale, and turlock airbase -- irrigation district for the purpose of forming a joint powers authority, the san walking tributaries authority. >> this is a joint powers agreement with five irrigation districts. we have much in common with in terms of our water rights and interests there. this would allow this commission to participate with them in developing strategies and plans to our mutual benefit on the san walking river. i am happy to answer any questions. >> harmony counties as the river runs through -- how many
counties does their run through? >> [inaudible] >> thank you. president moran: thank you. any public comment? >> hello, again. i think this is a bad idea and i encourage you to hold off and think about it a little bit. it is a very different culture in the central valley. it is basically opposing -- you might be familiar with it. it is opposing anything that changes the status quo. there is -- try to make sure that it does allow -- the salt does not encroach too much. there is the bay delta issue that is being addressed. san francisco is a real leader.
san francisco puc in balancing the need for it humans and the environment. you have done some amazing things. the watershed approval program. you committed to dollars million to the acquisition of dos rios. that was purchased over a week ago after 10 years. that area is going to be restored, you will be invited to a big celebration on may 21. you got it already come a great. bat -- we're also proud of what the puc does. you are doing great stuff. these other agencies, is a very different culture and i think -- i do not think it will do you a lot of good and it will put you in bed with people who do not value the environment the way we do in san francisco and the bay area. i encourage you to think about it all a bit more if not just say no.
we will go our own course. thank you. president moran: do have any comment on that? >> i would be happy to. one of the things about san francisco is our and unique situation. we're a coastal urban city with our customers. we have a lot in common. we have a lot in common with the folks in the central valley who are water users from the same system. there are many instances where we need to work for a closely with our partners on the rivers to make sure that we are working with -- with the context of what we consider the best regulation, the most effective regulation in terms of flows that could be provided. we actually do have a lot in common with them. as opposed to the state and federal water contractors who are large water uses that have different interests from those
who are water rights holders. that does not mean we're bound to follow lockstep with anything. -- anything those folks want to do in the central valley. we would have a different interest. this joint powers agreement allows san francisco to not participate in specific projects if we find they are not in our best interest as an entity. it does give what we think is the necessary cooperation but with also the necessary ability to say now, there is something the rest of you want to do that we do not want to do and we will not do that. our name is not associated with it at all. it is a special project. they would carry on by themselves. commissioner torres: who are the signatories to this agreement? >> it is the merced irrigation district. commissioner torres: forgive me tfor asking.
>> the oakdale and south san joaquin and -- >> each has a board of directors and they are represented. commissioner torres: were with the opposition come from given the last witness posing statements? >> the last witness? >> he said we should not approve. we're more progressive than irrigation districts on many issues. that does not mean we should not cooperate with them on many other things. we can separate pathways when there are circumstances. >> i am not clear as to where the disagreement is. >> we are suggesting -- he was
suggesting we would not joined. he believes our interests are so different and our position and a staff position is that often, we have been the ones who have been there bring together rural agriculture and urban folks to move forward. we have found that working in collaboration with people in the central valley has been of assistance to everyone in the state. >> what is left short of that? >> if we do not join this? >> yes. >> we are a little bit more on our own. which means -- how best to describe that. it means we would have fewer allies when it comes time for different positions to be articulated and argued through. >> there are relying on us to join with them. >> they're asking us to. it is of to us. >> is this not a successor
organization? >> this is a successor to the san joaquin server authority which we have been a member of which included these members and two other irrigation districts in the san joaquin valley who are not part of this. >> the largest or the loudest voice in california water politics is exercised by the exporters and the central valley project and state water project exporters. our interests are sometimes in concert with tears, sometimes not. we're upstream to birders. our interests are different. and those interests need a strong voice. we are not strong enough by ourselves to represent that interest effectively. there are times and issues when
having an association like this where you can go arm in arm with people of similar interests into this political discussions is very important. i think if we did [inaudible] -- the interests of upstream diverter such as ourselves would be more fractionalized and less effective in their presentation. >> i have been involved in these water wars since 1975. i want to make sure we are moving in the right direction. i was not familiar with the joint powers agreement before. and my second question is, is csac involved? have they said yes, we want to join with you as well? or is it the individual water districts who are separately elected? they are separately elected and oftentimes their interests do not align with their county
interests as boards of supervisors. there are lots of different forces at play. >> many times these districts are composed of farmers who have been elected for decades. >> largely irrigation districts, they also serve larger urban areas. >> of course. >> i clearly understand what the benefits are of the affiliation with the work group. i think i can pretty much get my arms around the notion that a successor agreement but with respect to the comments that were made by the earlier witness, while i get the benefits, i still am trying to figure out what the burdens are. i see that there is the capacity to raise money and the entity also has the capacity to contract. bear with me if you will. in the event that the entity determines the want to engage a contract for some as yet to be
stated purpose and that purpose does not jibe with the program we have here, is there a mechanism available for s to prohibit that counted for moving forward? or do we just pull out and not find it? if they can enter into a country with the state, public, private, france, any entity. i'm concerned the protections for the san francisco puc, let's say we get into some ideological type crusade. whatever it is. i want to know what local there is for us to utilize the that. >> primarily as described in the special projects area, are the things is beyond general strategies and planning but get too specific activities where san francisco can choose to not participate in any given special project. members cannot compel san
francisco to participate financially or in any of the way in this project. -- of those projects. >> can we stop them from doing it? no. they can continue and we would not be part of. the concern is whether our name would be misused in some kind of hearing are setting. everyone believes this. we're saying san francisco does not and we would back out of those types of activities. >> if i may. the association cannot take action without consent of all parties including san francisco. there is also a provision that says the association will not take any action in the interest of any party. there is numerous protections